The median voter theorem holds that the supply of public goods is determined by the median voter’s demand, considered decisive in voting. The paper proposes two new tests of the theorem based on all towns in France with population of over 10,000. The authors develop two test methods, a non-parametric method based on revealed preference theory and a parametric method based on the utility function in monetary equivalent terms. It is shown that the hypothesis that municipal public spending is consistent with median voter utility maximisation cannot be rejected. The indicators computed, the mean efficiency indexes for the observed choices and the percentage of the median voter’s tax “wasted” by inefficient choices, both suggest that the supply of local public goods is indeed determined by median voter demand.
Keywords
- median voter theorem
- local public goods
- revealed preference theory